(By Balachander) J.C. Penney Co Inc. (NYSE:JCP) slipped to a quarterly loss as sales plunged and margins contracted sharply as it reconsidered its approach to pricing and shares of department store chain tumbled 9.50 percent in premarket trading on Friday.
For 2012, the Plano, Texas-based company does not expect to meet its non-GAAP earnings forecast as it continues to .
For the three-month period ended July 28, JCP lost 37 cents a share on an adjusted basis, compared with profit of 19 cents a share in the same period last year. Wall Street analysts expected a loss of 25 cents per share. Net loss was $147 million or 67 cents a share.
Total net sales fell 22.6 percent to $3.02 billion, trailing consensus estimate of $3.20 billion. Comparable store sales dropped 21.7 percent, versus a 1.5 percent gain in the year-ago quarter. Internet sales through jcp.com slumped 33 percent.
Gross margin contracted to 33.2 percent from 38.3 percent, hit by the company's lower sales and transitional shop markdowns. Adjusted gross margin shrank 340 basis points to 36.6 percent for the second quarter.
"We have now completed the first six months of our transformation and while business continues to be softer than anticipated, we are con?dent the transformation of jcpenney is on track," commented chief executive Ron Johnson.
Early this year, J.C. Penney unveiled a three-tiered pricing strategy favoring everyday low prices.
JCP shares, which have been trading in the 52-week range between $19.06 and $43.18, ended Thursday's regular trading at $22.10.